T/01Tool

Compound interest

Start with an amount you already have, add a monthly top-up if you like, and watch contributions and growth separate over time.

Your inputs

Starting amount

Monthly contribution

Years invested

Expected yearly return

Broad stock indices have historically averaged roughly 7–10% a year before inflation, with big swings along the way.

Assumed inflation

Try 3% for the US or 6% for India as rough long-run averages.

Final value: $142.4K
Total contributed: $53K
Growth earned: $89.4K
In today's money: $78.9K; After 3% inflation

How it grows

Contributions
Growth

Contributions stack against investment growth. Notice how growth overtakes contributions in later years.

01Method

How this works.

Every month: balance = balance × (1 + r ÷ 12) + monthly top-up, where r is the yearly return. The inflation-adjusted figure is balance ÷ (1 + inflation)^years.

What it assumes

The same return every year. Real markets swing, sometimes by 20% or more in a single year.
Interest compounds monthly and top-ups land at the end of each month.
No fees or taxes. Both reduce what you actually keep.
Inflation stays constant over the whole period.

Worked example

Start with $5,000, add $200 a month, and assume 8% a year for 20 years. You put in $53,000 and end with about $142,438, of which $89,438 is growth. At 3% inflation that is worth about $78,865 in today's money.

Start with ₹4,25,000, add ₹17,000 a month, and assume 8% a year for 20 years. You put in ₹45,05,000 and end with about ₹1,21,07,238, of which ₹76,02,238 is growth. At 3% inflation that is worth about ₹67,03,484 in today's money.

Learn the idea behind it

Terms used here: Compound interest, Principal, Real return, Rule of 72.

Every number here is a simplified illustration based on the inputs you choose. Returns are not guaranteed and real markets vary — sometimes a lot — year to year. This is education, not financial advice.